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G.R. No.

L-24950 March 25, 1926

VIUDA DE TAN TOCO, plaintiff-appellant,

Arroyo & Evangelista for appellant.
Provincial Fiscal Borromeo Veloso for appelle.


It appears from the record that the widow of Tan Toco had sued the municipal council of Iloilo
for the amount of P42,966.40, being the purchase price of two strips of land, one on Calle J. M.
Basa consisting of 592 square meters, and the other on Calle Aldiguer consisting of 59 square
meters, which the municipality of Iloilo had appropriated for widening said street. The Court of
First Instance of Iloilo sentenced the said municipality to pay the plaintiff the amount so claimed,
plus the interest, and the said judgment was on appeal affirmed by this court.1

On account of lack of funds the municipality of Iloilo was unable to pay the said judgment,
wherefore plaintiff had a writ of execution issue against the property of the said municipality, by
virtue of which the sheriff attached two auto trucks used for street sprinkling, one police patrol
automobile, the police stations on Mabini street, and in Molo and Mandurriao and the concrete
structures, with the corresponding lots, used as markets by Iloilo, Molo, and Mandurriao.

After notice of the sale of said property had been made, and a few days before the sale, the
provincial fiscal of Iloilo filed a motion which the Court of First Instance praying that the
attachment on the said property be dissolved, that the said attachment be declared null and void
as being illegal and violative of the rights of the defendant municipality.

Plaintiffs counsel objected o the fiscal's motion but the court, by order of August 12, 1925,
declared the attachment levied upon the aforementioned property of the defendant municipality
null and void, thereby dissolving the said attachment.

From this order the plaintiff has appealed by bill of exceptions. The fundamental question raised
by appellant in her four assignments of error is whether or not the property levied upon is
exempt from execution.

The municipal law, section 2165 of the Administrative Code, provides that:

Municipalities are political bodies corporate, and as such are endowed with the faculties of
municipal corporations, to be exercised by and through their respective municipal government in
conformity with law.

It shall be competent for them, in their proper corporate name, to sue and be sued, to contract
and be contracted with, to acquire and hold real and personal property for municipal purposes,
and generally to exercise the powers hereinafter specified or otherwise conferred upon them by

For the purposes of the matter here in question, the Administrative Code does not specify the
kind of property that a municipality may acquire. However, article 343 of the Civil Code divides
the property of provinces and towns (municipalities) into property for public use and patrimonial

According to article 344 of the same Code. in trust for the benefit of their inhabitants. deduced from the principles of moral equity has only given way to the more enlarged contemplation of the great and paramount interests of public order and the principles of government. Manresa says that "In accordance with administrative legislation" (Spanish) we must distinguish. as a general proposition. is not intrinsic with this kind of property. where he says that: States statutes often provide the court houses. and may be sold. fountains and public waters. provincial roads and foot-path. and in some instances practically destroy it. wharves." It is generally held that property owned by a municipality. The first differs from property for public use in that generally its enjoyment is less. is inalienable and not subject to prescription. Notwithstanding this. Likewise. that is. property for public of the municipality is not within the commerce of man so long as it is used by the public and. these should not be subjected by legal process to the satisfaction of its creditors. consequently. school houses. as it is limited to neighbors or to a group or class thereof. is subject to execution on a judgment against the municipality. is exempt. and a stock of liquors carried in a town dispensary. is used in the name of the town or province by the entities representing it and. and the like. consequently. The principle is that the property for public use of the State is not within the commerce of man and. squares. drives and public improvements of general benefit built at the expense of the said towns or provinces. jails and other buildings owned by municipalities and the lots on which they stand shall be exempt from attachment and execution. streets. Respecting this subject the Supreme Court of Louisiana remarked: "On the first view of this question there is something very repugnant to the moral sense in the idea that a municipal corporation should contract debts. held by municipal and used for public purposes. for by its very nature it may be enjoyed as though it were private property. said property is also inalienable. This rule applies to shares of stock owned by a municipal corporation. where not used for a public purpose but for quasi private purposes. But independent of express statutory exemption. are not subject to execution. public buildings. "between that a common benefit and that which is private property of the town. private property. The American Law is more explicit about this matter as expounded by Mcquilin in Municipal Corporations. however. parks. real and personal. having no resources but the taxes which are due to it. This consideration. and to deny them these means the very purpose of their creation would be materially impeded. more or less general. Municipal corporations are created for public purposes and for the good of the citizens in their aggregate or public capacity. engines and engine houses. volume 3. we believe that the principle governing property of the public domain of the State is applicable to property for public use of the municipalities as said municipal is similar in character. is of little practical importance in this jurisdiction in view of the different principles underlying the functions of a municipality under the American rule. like and private property. property. squares. So city waterworks. and. The third group. are exempt. streets. The reason for the exemption is obvious. All other property possessed by the said towns and provinces is patrimonial and shall be subject to the provisions of the Civil Code except as provided by special laws. and the ." Such distinction. giving a source of revenue. For example. That they may properly discharge such public functions corporate property and revenues are essential. as to the patrimonial property of the towns. furthermore. paragraph 1160. Commenting upon article 344. Mr. and that. are property for public use. such use.

rather than a judicial question. Louisiana Construction Co. wharves. hospitals. that it never ceased to be such in order to become private property of the city. hose and hose carriages.. If municipal property exempt from execution is destroyed. The United States Supreme Court on an appeal held that the wharf was public property. except that in the New England States the individual liability of the inhabitant is generally maintained. In that case it was proven that the said wharf was a parcel of land adjacent to the Mississippi River where all shipments of sugar and molasses taken to New Orleans were unloaded.. was property for the public use of the City of New Orleans and was not subject to attachment for the payment of the debts of the said city. the following is found: Where property of a municipal or other public corporation is sough to be subjected to execution to satisfy judgments recovered against such corporation. the general rule is that such property may be seized and sold under execution against the corporation. In the case of City of New Orleans vs. 35 Law. promenades.. But the mere fact that corporate property held for public uses is being temporarily used for private purposes does not make it subject execution. the question as to whether such property is leviable or not is to be determined by the usage and purposes for which it is held. the insurance money stands in lieu thereof and is also exempt. The members or inhabitants of a municipal corporation proper are not personally liable for the debts of the municipality. cemeteries. property not useful or used for a public purpose but for quasi private purposes. 10 per cent of which was turned over to the city treasury. 556). But property held for public purposes is not subject to execution merely because it is temporarily used for private purposes. although if the public use is wholly abandoned it becomes subject to execution. In Corpus Likewise it has been held that taxes due to a municipal corporation or country cannot be seized under execution by a creditor of such corporation. The rule is that property held for public uses. is not subject to levy and sale under execution against such corporation. page 355. engine houses. Ltd. Ltd. That city leased the said wharf to the Louisiana Construction Company. landing places fire engines. wherefore the company could not levy execution upon the wharf in order to collect the amount of the judgment rendered in favor thereof. Whether or not property held as public property is necessary for the public use is a political. public markets. open to the public. such as public buildings. squares parks. precisely as similar property of individuals is seized and sold. streets. 654. as distinguished from its public or governmental capacity. . S. it was held that a wharf for unloading sugar and molasses. in order that it might erect warehouses so that the merchandise upon discharge might not be spoiled by the elements. The said company was given the privilege of charging certain fees for storing merchandise in the said warehouses and the public in general had the right to unload sugar and molasses there by paying the required fees. ed. But where a municipal corporation or country owns in its proprietary.. vol 23. and generally everything held for governmental purposes. (140 U. The rule also applies to funds in the hands of a public officer.

It is evident that the movable and immovable property of a municipality. 149. because that would be to permit a person who has contracted with the state or with the administrative officials thereof to conduct and manage a service of a public character. necessary for governmental purpose. to the prejudice of the state and the public interests. was converted into a wharf by the city for public use. to be substituted. the said public market could be attached and sold at public auction. yet when among such property there is included the special right granted by the Government of usufruct in a building intended for a public service. The special concession of the right of usufruct in a public market cannot be attached like any ordinary right. thus giving rise to the possibility of the regular course of a public service being disturbed by the more or less legal action of a grantee. In the case of Tufexis vs. may not be attached and sold for the payment of a judgment against the municipality.. without the knowledge and consent of the administrative authorities. such right of the creditor to the collection of a debt owed him by the debtor who enjoys the said special privilege of usufruct in a public market is not absolute and may be exercised only through the action of court of justice with respect to the profits or revenue obtained under the special right of usufruct enjoyed by debtor.. in the same manner that the rights of such creditors of a railroad company can be exercised and their credit collected only out of the gross receipts remaining after deduction has been made therefrom of the operating expenses of the road. Olaguera and Municipal Council of Guinobatan (32 Phil. 430). the Supreme Court of the United States that a public wharf on the banks of the Mississippi River was public property and not subject to execution for the payment of a debt of the City of New Orleans where said wharf was located. It was held that the land was public property as necessary as a public street and was not subject to execution on account of the debts of the city. 1886. The privilege or franchise granted to a private person to enjoy the usufruct of a public market cannot lawfully be attached and sold. extended to the overseas provinces by the royal order of August 3. who charged a certain fee for its use. and when this privilege is closely related to a service of a public character. S. ed.. The supreme reason for this rule is the character of the public use to which such kind of property is devoted. the question raised was whether for the payment of a debt to a third person by the concessionaire of a public market.) For the reasons contained in the authorities above quoted we believe that this court would have reached the same conclusion if the debtor had been municipality of Guinobatan and the public market had been levied upon by virtue of the execution. The Supreme Court held that: Even though a creditor is unquestionably entitled to recover out of his debtor's property.In the case of Klein vs. The necessity for government service justifies that the property of . 1896. 25 Law. by one who took no part in the contract. City of New Orleans (98 U. (Law of November 12. It was further held that the fees collected where also exempt from execution because they were a part of the income of the city. In this case a parcel of land adjacent to the Mississippi River. and a creditor of such person can recover his debt only out of the income or revenue obtained by the debtor from the enjoyment or usufruct of the said privilege. 654). which formerly was the shore of the river and which later enlarged itself by accession.

either in the treasury or when in transit to it. and PLAZA THEATRE. While this question is not necessarily included in the one which is the subject of this appeal. de Peralta for petitioner. fines. 1507. By virtue of all the foregoing. par. vs. JR. VICENTE OROSA. In this sense this assignment of error. Even the municipal income. a portion of the sovereign power. the judgment appealed from should be and is hereby affirmed with costs against the appellant. In volume 1. Nos.public of the municipality be exempt from execution just as it is necessary to exempt certain property of private individuals in accordance with section 452 of the Code of Civil Procedure.) based upon the decisions of several States of the Union upholding the same principle and which are cited on page 2679 of the aforesaid work. political. 1958 ENRIQUE LOPEZ. is groundless.. To enable them beneficially to exercise these powers and discharge these duties. Another error assigned by counsel for appellant is the holding of the court a quo that the proper remedy for collecting the judgment in favor of the plaintiff was by way or mandamus. Nicolas Belmonte and Benjamin T. yet we believe that the holding of the court. Municipal Corporations by Dillon we find that: Municipal corporations are instituted by the supreme authority of a state for the public good. it has no property subject to execution. 4. L-10817-18 February 28. Republic of the Philippines SUPREME COURT Manila EN BANC G. Deprived of its regular and adequate supply of revenue. This doctrine is maintained by Dillon (Municipal Corporations. and penalties. They exercise. and to provide for the police and local government of certain designated civil divisions of its territory. INC.R. respondents. after a judgment is rendered against a municipality. is exempt from levy and execution. and the proceeds of such judgments in the hands of officers of the law. . it is the settled doctrine of the law that only the public property but also the taxes and public revenues of such corporations cannot be seized under execution against them. 5th ed. petitioner. we believe. according to the above quoted authorities. by delegation from the legislature. chiefly by taxation. assigned as error by appellant's counsel. The revenue of the public corporation is the essential means by which it is enabled to perform its appointed work. The doctrine of the inviolability of the public revenues by the creditor is maintained. Based upon considerations of this character. and municipal duties.. vol. Judgments rendered for taxes. and has no means of payment but the taxes which it is authorized to collect. So ordered. page 467. are not subject to execution unless so declared by statute. although the corporation is in debt. The main object of their creation is to act as administrative agencies for the state. they are clothed with the authority to raise revenues. such a corporation is practically destroyed and the ends of its erection thwarted. To this end they are invested with certain governmental powers and charged with civil. is true when. and subordinately by other modes as by licenses.

Inc.000 from the Philippine National Bank with the Luzon Surety Company as surety. however. 1946. promised to obtain a bank loan by mortgaging the properties of the Plaza Theatre. 3344.771. and was acquired by the corporation on September 25. Plaintiff also caused the annotation of a notice of lis pendens on said properties with the Register of Deeds. Pursuant to said verbal agreement. under Act No. As Lopez was pressing Orosa for payment of the remaining unpaid obligation. that in case defendants fail to pay the same. and at Orosa's behest and assurance that the latter would be personally liable for any account that the said construction might incur. and as the obligation still remained unsettled. 1947. 1946.. Jr.. Persistent demand from Lopez for the payment of the amount due him caused Vicente Orosa. Although Lopez expressed his unwillingness to invest of the same. an alleged "deed of assignment" of his 420 shares of stock of the Plaza Theater. Jr. Subsequently. because he had purchased and received the same on his personal account. R.000. O-391 owned by the corporation be sold at public auction and the proceeds thereof be applied to said indebtedness. his family and close friends were organizing a corporation to be known as Plaza Theatre. the latter and Belarmino Rustia. praying that defendants be sentenced to pay him jointly and severally the sum of P41. 1946. the president of the corporation. thus leaving a balance of P41. O-391 was correspondingly issued on October 25. Cruz for respondent Luzon Surety Co. or that the 420 shares of the capital stock of the Plaza Theatre. also a resident of the same province. Inc.. as early as November.Tolentino & Garcia and D. dropped at Lopez' house and invited him to make an investment in the theatre business..: Enrique Lopez is a resident of Balayan. Jr. 1947. to which assurance Lopez had to accede.771. Inc. and Plaza Theater.35. Macatangay for respondent Plaza Theatre. We may state at this juncture that the Plaza Theatre was erected on a piece of land with an area of 679. out of which said amount of P41.. a complaint with the Court of First Instance of Batangas (Civil Case No. when the corporation applied for the registration of the land under Act 496. Jr. the first denying that the materials were delivered to him as a promoter and later treasurer of the corporation. Unknown to him. 4501 which later became R-57) against Vicente Orosa. FELIX. the mortgage on the same was registered on November 16. 1946. and the corporation in turn executed a mortgage on the land and building in favor of said company as counter-security. 1946. and for such other remedies as may be warranted by the circumstances.848. Jose B. Lopez filed on November 12.000 in favor of the creditor. Inc.35. and Plaza Theatre.. It was intimated that Orosa. filed separate answers. Lopez delivered the lumber which was used for the construction of the Plaza Theatre on May 17. doing business under the trade name of Lopez-Castelo Sawmill. assigned by Vicente Orosa... up to December 4 of the same year. J. Sometime in May. for P6.17 square meters formerly owned by Vicente Orosa. with legal interest from the firing of the action. Lopez was paid only P20.. Jr. Batangas. that the land on . As the land at that time was not yet brought under the operation of the Torrens System.50. Vicente Orosa. Jr.85.. at P100 per share or with a total value of P42.255. to execute on March 17.771. without any encumbrance appearing thereon. Inc. he agreed to supply the lumber necessary for the construction of the proposed theatre. such mortgage was not revealed and thus Original Certificate of Title No.35 would be satisfied. 1947. But of the total cost of the materials amounting to P62. Inc. that would engage in such venture. Defendants Vicente Orosa. the corporation already got a loan for P30. to said plaintiff be sold at public auction for the same purpose. Inc. Lopez further agreed that payment therefor would be on demand and not cash on delivery basis. that the building and the land covered by OCT No.

17 GLRO Rec. such transactions were in good faith and for valuable consideration thus when plaintiff failed to claim said materials within 30 days from the time of removal thereof from Orosa. and the Plaza Theatre.. prayed that the complaint be dismissed. it could not have contracted any obligation prior to said date. upon discovery that the land was already registered under the Torrens System and that there was a notice of lis pendens thereon. It was. 296). which was made the basis of OCT No. It was thus prayed that he be declared exempted from the payment of any deficiency in case the proceeds from the sale of said personal properties would not be enough to cover the amount sought to be collected. and such other relief as may be just and proper in the premises. in order to annotate the rights and interests of the surety company over said properties (Land Registration Case No. held that defendants Vicente Orosa. Inc. that the surety company was guilty of negligence when it failed to present an opposition to the application for registration of the property. No. O-319. the trial judge took into consideration the fact that when plaintiff started the delivery of lumber in May. 1947. Inc. that the codal provision (Art. 1948. in the meantime.000 for damages. that the claim could not have been refectionary credit.. and that the Plaza Theatre. Jr. and that if any violation of the rights and interest of said surety would ever be made. 3344. the land was not yet owned by the corporation. that said defendant be awarded the sum P 5. a petition for review of the decree of the land registration court dated October 18. Inc.. asserting that the amount demanded by him constituted a preferred lien over the properties of the obligors. 1946. after making an exhaustive and detailed analysis of the respective stands of the parties and the evidence adduced at the trial. practically set up the same line of defense by alleging that the building materials delivered to Orosa were on the latter's personal account. The two cases were heard jointly and in a decision dated October 30.. Opposition thereto was offered by Enrique Lopez. for such kind of obligation referred to an indebtedness incurred in the repair or reconstruction of something already existing and this concept did not include an entirely new work..771. Defendant Plaza Theatre. plaintiff was barred from recovering any deficiency if the proceeds of the sale thereof at public auction would not be sufficient to cover and satisfy the obligation. In making the pronouncement that the lien was merely confined to the building and did not extend to the land on which the construction was made. As special defense. 1923 of the old Spanish Civil Code) specifying that refection credits are preferred could refer only to buildings which are also classified as real . Inc. were jointly liable for the unpaid balance of the cost of lumber used in the construction of the building and the plaintiff thus acquired the materialman's lien over the same. and that there was no understanding that said materials would be paid jointly and severally by Orosa and the corporation. same must be subject to the lien in his favor. nor was a lien charged on the properties of the latter to secure payment of the same obligation. The surety company. and that the 420 shares of stock of the Plaza Theatre. was not assigned to plaintiff as collaterals but as direct security for the payment of his indebtedness. or within the 1-year period after the issuance of the certificate of title. As special defense. this defendant contended that as the 420 shares of stock assigned and conveyed by the assignor and accepted by Lopez as direct security for the payment of the amount of P41.which the movie house was constructed was not charged with a lien to secure the payment of the aforementioned unpaid obligation. 1946. defendant corporation averred that while it was true that the materials purchased by Orosa were sold by the latter to the corporation. lumber became a different and distinct specie and plaintiff lost whatever rights he might have in the same and consequently had no recourse against the Plaza Theatre. the lower Court. Inc.. on the other hand. filed on August 17. having been incorporated on October 14. 1952. that the mortgage in favor of Luzon Surety Company was previously registered under Act No. therefore.35 were personal properties.

so We will not take up or consider anything on that point. and inasmuch as said provision does not contain any specification delimiting the lien to the building.. or immovable property.. irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner.. 1952. but same was denied by order the court of December 23. a building is an immovable property. had no objection to the review of the decree issued in its favor by the land registration court and the inclusion in the title of the encumbrance in favor of the surety company. Appellant. for while it is true that generally. pertinent law on the matter. the 420 shares of stock assigned by Orosa to plaintiff be sold at public auction and the proceeds thereof be applied to the payment of the amount due the plaintiff. is also extended to the land which the construction was made. real estate connotes the land and the building constructed thereon. not entered or recorded. In this instance.771. said article must be construed as to embrace both the land and the building or structure adhering thereto. and in view of the absence of any specific provision of law to the contrary. We cannot subscribe to this view.. and that the lien did not extend to the land. declared that plaintiff's lien on the building was superior to the right of the surety company. however. Inc. that in case of default. in the enumeration of what may constitute real properties1 could mean only one thing — that a building is by itself an immovable property. Credits for refection. it is obvious that the inclusion of the building..35 with legal interest and costs within 90 days from notice of said decision. 1923. a doctrine already pronounced by this Court in the case of Leung Yee vs. contends that the lien created in favor of the furnisher of the materials used for the construction. with respect to the estate upon which the refection was made. 37 Phil. It is argued that in view of the employment of the phrase real estate. upon which said refection was made. And finding that the Plaza Theatre. said mortgage was subject to the materialman's lien in favor of Enrique Lopez. plaintiff-appellant raises 2 issues: (1) whether a materialman's lien for the value of the materials used in the construction of a building attaches to said structure alone and does not extend to the land on which the building is adhered to. and that the encumbrance in favor of the surety company be endorsed at the back of OCT No. . It was. which reads as follows: ART. and in support thereof he relies on Article 1923 of the Spanish Civil Code. Moreover. to pay jointly the sum of P41. Defendants Orosa and the Plaza Theatre. and then to this Tribunal. With respect to determinate real property and real rights of the debtor. were thus required to pay jointly the amount of P41. the following are preferred: xxx xxx xxx 5. It is to be noted in this appeal that Enrique Lopez has not raised any question against the part of the decision sentencing defendants Orosa and Plaza Theatre. Inc. repair or refection of a building. separate and distinct from the land. the court a quo granted the petition filed by the latter company. O-391. plus interest and costs.35. and only with respect to other credits different from those mentioned in four preceding paragraphs. Strong Machinery Co. however. The matter was thus appealed to the Court of appeals. Plaintiff tried to secure a modification of the decision in so far as it declared that the obligation of therein defendants was joint instead of solidary. 644.771. and (2) whether the lower court and the Court of Appeals erred in not providing that the material mans liens is superior to the mortgage executed in favor surety company not only on the building but also on the land. with notation I that with respect to the building. which affirmed the lower court's ruling.

i. with costs against appellant. The area deteriorated increasingly to the great prejudice of the community in general. et. Wherefore. Branch 2. The problem festered for some more years under a presumably uneasy truce among the protagonists. and on the strength of the foregoing considerations.A close examination of the provision of the Civil Code invoked by appellant reveals that the law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refection or work was made. where the Court of First Instance (CFI) Pampanga. on a strip of land measuring 12 by 77 meters (talipapa). . Acting thereon after an investigation conducted by the municipal attorney. L-61311 21 September 1987 Facts: On 7 November 1961. the municipal council of San Fernando adopted Resolution 29.” thereby impliedly revoking Resolution 218 (series of 1961). On 2 November 1968. the Association of Concerned Citizens and Consumers of San Fernando filed a petition for the immediate implementation of Resolution 29. On 12 January 1982. The writ of preliminary injunction was made permanent. This being so. which declared the subject area as “the parking place and as the public plaza of the municipality. was beyond the commerce of man and therefore could not be the subject of private occupancy. OIC (Office of the Mayor) Vicente Macalino issued on 14 June 1982 a resolution requiring the municipal treasurer and the municipal engineer to demolish the stalls beginning 1 July 1982.. issued a writ of preliminary injunction that prevented the FUMTA members from constructing the said stalls until final resolution of the controversy. for some reason. that the materialman's lien could be charged only to the building for which the credit was made or which received the benefit of refection. being public in nature. the inevitable conclusion must be that the lien so created attaches merely to the immovable property for the construction or repair of which the obligation was incurred. as the makeshift stalls render the area as virtual fire trap. Villanueva vs Castaneda GR No. (claiming that they were granted previous authorization by the municipal government to conduct business therein). therefore.. to restore the property to its original and customary use as a public plaza. the lien in favor of appellant for the unpaid value of the lumber used in the construction of the building attaches only to said structure and to no other property of the obligors. while the case was pending. On 18 January 1964. the decision appealed from is hereby affirmed. holding at the interest of the mortgagee over the land is superior and cannot be made subject to the said materialman's lien. al. The decision was not enforced as the petitioners were not evicted from the place. none of whom made any move. in Civil Case 2040. Evidently. Judge Andres C. al.e. the lower court was right in. Considering the conclusion thus arrived at. Aguilar decided the aforesaid case and held that the land occupied by Villanueva. the municipal council of San Fernando (Pampanga) adopted Resolution 218 authorizing some 24 members of the Fernandino United Merchants and Traders Association (FUMTA) to construct permanent stalls and sell along Mercado street. The number of vendors in the area (talipapa) ballooned to 200. et. The action was protested on 10 November 1961 by Felicidad Villanueva. It is so ordered.

to file a petition on certiorari with the Supreme and convenience of the municipality and the inhabitants thereof. was impleaded. and the sidewalks and crossings for the pedestrians. and the same shall only be used or occupied for other purposes as provided by ordinance or regulation. for the promotion or protection of the general welfare. Any contract entered into in connection with the sidewalk. and the motion for reconsideration on 5 August 1982. is ipso facto null and ultra vires. A plaza cannot be used for the construction of market stalls. Fernan FACTS Petitioners Adriano Maneclang et. The Maneclangs appealed the decision to the IAC but . or even abrogate it entirely. Every contract affecting the public interest suffers a congenital infirmity in that it contains an implied reservation of the police power as a postulate of the existing legal order. Decision: A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other contractual undertaking. specially of residences. Issue: Whether the Ordinance impairs the alleged lease contracts between the market stall vendors occupying the municipal plaza. who replaced Macalino as OIC of San Fernando. as may be necessary to carry into effect and discharge the powers and duties conferred upon it by law and such as shall seem necessary and proper to provide for the health and safety. to be devoted to public use and to be made available to the public in general. Pangasinan. which is subject to and limited by the paramount police power. On the other hand. Also. a portion of a public sidewalk is likewise beyond the commerce of man. This power can be activated at any time to change the provisions of the contract. Maneclang v. al. and for the protection of property therein. et. The streets and public places of the city shall be kept free and clear for the use of the public. peace. prompting Villanueva. promote the prosperity. Thus. stalls block the free passage of pedestrians resulting to clogged with vehicular traffic. Intermediate Appellate Court GR L-66575 24May1988 J. filed with the CFI a complaint for quieting of title over a certain fishpond located within the 4 parcels of land belonging to them situated in Bugallon. The lease of a public plaza of a municipality in favor of a private person is null and void. Town plazas are properties of public dominion. Such an act will not militate against the impairment clause. police power cannot be surrendered or bargained away through the medium of a contract. filed a petition for prohibition with the CFI Pampanga (Civil Case 6470) on 26 June 1982. police power under the general welfare clause authorizes the municipal council to enact such ordinances and make such regulations. comfort. improve the morals. not repugnant to law. in going from one place to another. Paterno Guevarra. and the Government. et. Petition dismissed. al. good order.The Villanueva. and that such structures constitute a nuisance subject to abatement according to law. The judge denied the petition on 19 July 1982. The trial court dismissed the complaint upon a finding that the body of water traversing their land is a creek constituting a tributary to Agno River and hence public in nature and not subject to private appropriation. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties. The sidewalk was intended for and was used by the public.

TEODORO and MYRNA. and as a public water. . after having been asked by the Court to comment to the case. Petitioners state that there would be no benefit on their part.the two resolutions dealing with its municipal waters. alter or change the nature of the creek as a property of the public domain. HELD/RATIO NO. Petitioners manifested that for lack of interest on the part of the awardee in the public bidding. Hence. RAMONA. An creek . SALOME RODRIGUEZ. no water gets in or out of the land. FERNANDO ZARCILLA. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. ISSUE Whether the stipulations in the Compromise Agreement adjudicating ownership over the questioned fishpond in favor of the Maneclangs are valid. THE INTERMEDIATE APPELLATE COURT and ALFREDO MAZA. is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription. acting thru its duly-constituted municipal council is clothed with authority to pass. but to the advantage of the municipality instead. No. Maza. since it is clear that after the National Irrigation Authority built the dike over the land. The stipulations partake of the nature of an adjudication of ownership in favor of the Maneclangs of the questioned fishpond that was clearly found to be originally a creek forming a tributary of the Agno River. they desire to amicably settle the case by submitting a Compromise Agreement praying that judgment be rendered recognizing their ownership over the land and the body of water found within their titled properties. the stipulations in the Compromise Agreement are null and void and have no legal effect for being contrary to law and public policy. defined as a recess or arm extending from a river and participating in the ebb and flow of the sea. this instant petition for review on certiorari. vs. The finding that the subject body of water is a creek belonging to the public domain is a factual determination binding upon the Supreme Court. However. nor its conversion into a fishpond. CLETO PEDROZO. VICTOR. L-66575 September 30.R. and it cannot be said that petitioners were deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world. NICOMEDES CORDERO. JULIETA. respondents.the IAC affirmed the trial court decision. 1986 ADRIANO MANECLANG. MARIANO GABRIEL. it cannot be registered under the Torrens System in the name of any individual and considering further that neitherthe mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond. all surnamed MANECLANG. petitioners. EDUCARDO CUISON. ANTONINA. as it did. which belongs to the public domain and is thus not susceptible to private appropriation and acquisitive prescription. CORLETO CASTRO. LOURDES. The Municipality of Bugallon. FELIX SALARY and JOSE PANLILIO.

Acting on the petition. this petition for review on certiorari. 4551. a creek. and as a public water. ordering an ocular inspection of the Cayangan Creek situated between Barrios Salomague Sur and Salomague Norte. on the other hand it is to the advantage and benefit of the municipality if the ownership of the land and the water found therein belonging to petitioners be recognized in their favor as it is now clear that after the National Irrigation Administration [NIA] had built the dike around the land. the same will not amount to any benefit of the parties. before respondents could do so. 102 Phil. the Court required the respondents to comment thereon. 38 and 95 of the Municipal Council of Bugallon Pangasinan. The finding that the subject body of water is a creek belonging to the public domain is a factual determination binding upon this Court. Pangasinan in the exercise of their legislative powers. no water gets in or out of the land. Corleto R. is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription. However. al. were passed by respondents herein as members of the Municipal Council of Bugallon. 592 [1934]. Manaoag. among other things. Considering that as held in the case of Mercado vs. nor its conversion into a fishpond. the Court finds the Compromise Agreement null and void and of no legal effect. 494. Hence. Court of Appeals. the same being contrary to law and public policy. 1975 upon a finding that the body of water traversing the titled properties of petitioners is a creek constituting a tributary of the Agno River. as clearly found by the lower and appellate courts. Pangasinan. alter or change the nature of the creek as a property of the public domain. and considering further that neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond. was originally a creek forming a tributary of the Agno River. it cannot be registered under the Torrens System in the name of any individual [Diego v. 59 Phil. 38 Phil. filed before the then Court of First Instance of Pangasinan. which.Loreto Novisteros for petitioners. defined as a recess or arm extending from a river and participating in the ebb and flow of the sea. and Resolution No. including the fishpond under consideration. J. stating therein. the awardee in the public bidding of the fishpond. FERNAN. petitioners manifested that for lack of interest on the part of respondent Alfredo Maza. Mangaldan v. Branch XI a complaint for quieting of title over a certain fishpond located within the four [41 parcels of land belonging to them situated in Barrio Salomague. 38. 95 authorizing public bidding for the lease of all municipal ferries and fisheries. 1 The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership in favor of herein petitioners of the fishpond in dispute. Castro for respondents.: Petitioners Adriano Maneclang. that "to pursue the case. The Municipality of Bugallon. and the annulment of Resolutions Nos. 1983. Municipal President of Macabebe. which affirmed the same on April 29. Petitioners appealed said decision to the Intermediate Appellate Court. Bugallon. acting thru its duly- . the parties desire to amicably settle the case by submitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of petitioners over the land the body of water found within their titled properties. The trial court dismissed the complaint in a decision dated August 15. et. therefore public in nature and not subject to private appropriation. The lower court likewise held that Resolution No.

the need to determine which law should apply. 1990. it is outside the commerce of men. Laurel vs Garcia GR 92013 July 25. We see no reason why a conflict of law rule should apply when no conflict of law situation exists. which is located in Japan. As such. It is one of the properties given by the Japanese Government as reparations for damage done by the latter to the former during the war. there can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. Respondents aver that Japanese Law. The answer is in the affirmative. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable. Facts: Petitioners seek to stop the Philippine Government to sell the Roppongi Property. WON Philippine Law applies to the case at bar. or the interpretation and effect of a conveyance. the essential validity and effect of the transfer. the respondents have failed to do. This. Petitioner argues that under Philippine Law. 2. It cannot be alienated. shall apply to the case because the property is located in Japan. WON the subject property cannot be alienated. it cannot be alienated. as it did the two resolutions dealing with its municipal waters. The Court further resolved to DISMISS the instant petition for lack of merit. such that the capacity to take and transfer immovables. the Court Resolved to set aside the Compromise Agreement and declare the same null and void for being contrary to law and public policy. As property of public dominion. Therefore. The answer is in the affirmative. Hence. the formalities of conveyance. Issues and Held: 1. and not Philippine Law. In the instant case. the Roppongi lot is outside the commerce of man. and it cannot be said that petitioners were deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world. IN VIEW OF THE FOREGOING. the subject property is property of public dominion. are to be determined.constituted municipal council is clothed with authority to pass. . and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. SO ORDERED. none of the above elements exists. Under Philippine Law. They posit that the principle of lex situs applies.

Ramirez and Trial Attorney David R.. BERCILLES Presiding Judge. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. In discussing who are capable of acquiring the lots.: This is a petition for the review of the order of the Court of First Instance of Cebu dismissing petitioner's application for registration of title over a parcel of land situated in the City of Cebu. 2193. Cebu City. PASCUAL A. and JOSE L. And the validity of the procedures adopted to effect its sale. the City Council of Cebu passed Resolution No. On September 23. the petitioner filed an application with the Court of First instance of Cebu to have its title to the land registered.R. on December 19. Office of the Acting Solicitor General Hugo E. through the Acting City Mayor. the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. J. Mabolo. This is governed by Philippine Law. approved on October 3. 1 Subsequently. 14th Judicial District.. ESPELETA. Cebu City. The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. Gutierrez. CONCEPCION. 1975 CEBU OXYGEN & ACETYLENE CO. Jr. HON. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. Branch XV. 1968. Hilario for respondents. The rule of lex situs does not apply. L40474 August 29. Assistant Provincial Fiscal. Jr. Province of Cebu. Borces Street. 2755. Borces Street. representing the Solicitor General's Office and the Bureau of Lands. INC. the same not being included in the City Development Plan. There is no question that the property belongs to the Philippines. Assistant Solicitor General Octavio R. 1968. petitioner. vs. The parcel of land sought to be registered was only a portion of M. declared the terminal portion of M.. authorizing the Acting City Mayor to sell the land through a public bidding.The issues are not concerned with validity of ownership or title. the City Council of Cebu. 3 By virtue of the aforesaid deed of absolute sale. 4 .00. executed a deed of absolute sale to the herein petitioner for a total consideration of P10. Mabolo. No. respondents. 1968.800. 1969. Jose Antonio R Conde for petitioner. the lot was awarded to the herein petitioner being the highest bidder and on March 3. 2 Pursuant thereto. as an abandoned road. . through Resolution No. the City of Cebu.

street or alley. Consequently.. it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract. For the resolution of this case. give the City of Cebu the valid right to declare a road as abandoned? and (2) Does the declaration of the road. boulevard. From the foregoing. the City Council shall have the following legislative powers: xxx xxx xxx (34) . The city council. avenue. shall form part of the patrimonial property of the State. park or square. So it is. In the case of Favis vs. City of Baguio. the petitioner poses the following questions: (1) Does the City Charter of Cebu City (Republic Act No. 7 where the power of the city Council of Baguio City to close city streets and to vacate or withdraw the same from public use was similarly assailed. it would seem to us. (2) Since that portion of the city street subject of petitioner's application for registration of title was withdrawn from public use. the instant petition for review. Faithfulness to the public trust will be presumed. Such power to vacate a street or alley is discretionary. as abandoned.On June 26. And the discretion will not ordinarily be controlled or interfered with by the courts. is the authority competent to determine whether or not a certain property is still necessary for public use. 3857) under Section 31.. Legislative Powers. Article 422 of the Civil Code expressly provides that "Property of public dominion. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance. paragraph 34. it is undoubtedly clear that the City of Cebu is empowered to close a city road or street. it cannot be subject to registration by any private individual. 1974. Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.." . Any provision of law and executive order to the contrary notwithstanding. the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground that the property sought to be registered being a public road intended for public use is considered part of the public domain and therefore outside the commerce of man. this court said: 5. 1974 the trial court issued an order dismissing the petitioner's application for registration of title. These are acts well within the ambit of the power to close a city street. on October 11. absent a plain case of abuse or fraud or collusion. 6 Hence. that appellant may not challenge the city council's act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. when no longer intended for public use or for public service. to close any city road. 5 After hearing the parties. make it the patrimonial property of the City of Cebu which may be the object of a common contract? (1) The pertinent portions of the Revised Charter of Cebu City provides: Section 31.

N-948. the order dated October 11. and the respondent court is hereby ordered to proceed with the hearing of the petitioner's application for registration of title. in very clear and unequivocal terms. LRC Rec. rendered by the respondent court in Land Reg. the withdrawal of the property in question from public use and its subsequent sale to the petitioner is valid. SO ORDERED. the Revised Charter of the City of Cebu heretofore quoted. the petitioner has a registerable title over the lot in question. ." Accordingly. Hence. 1974. WHEREFORE. states that: "Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.Besides. No. N-44531 is hereby set aside. Case No.